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Sembcorp Marine Rights Issue
03 Sep 2021 (609 views)

I have received the letter about my entitlement to the rights issue. 

I hold 200,000 shares of Sembcorp Marine (current price is $0.086) and are given the right to subscribe for 300,000 new shares at $0.08. 

Normally, if the difference between the new shares (i.e. rights) and the existing share (also called the mother share) is small, I would not take up the rights. 

In this case, I consider the difference 7.5% to be small.

However, when I looked a the price chart of Sembcorp Marine for the past few months (see below), I saw that it had dropped from $0.191 on 24 June to $0.123 on 8 August to the current price of $0.08.

The price had dropped during the past two months due to this rights issue. 

I consider that the price drop has been excessive. My guess is that the share price should be worth at least $0.123. 

I decided to take up the rights issue(300,000 rights and 100,000 excess rights). I will also be applying for the rights on behalf of my family members.

Caution
Normally, an investor should study the prospects for the company after the proposed merger and also the outlook for the marine sector. I find it to be too complicated.

I am prepared to take the current share price as reflecting the value of the company - as seen by other investors who studied the reports made by the professional analysts.


Tan Kin Lian

Note  This is my personal view. I am not giving investment advice on the merits of this rights issue to other shareholders. 
 


Sembcorp Marine Rights Issue
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I have received the letter about my entitlement to the rights issue. 

I hold 200,000 shares of Sembcorp Marine (current price is $0.086) and are given the right to subscribe for 300,000 new shares at $0.08. 

Normally, if the difference between the new shares (i.e. rights) and the existing share (also called the mother share) is small, I would not take up the rights. 

In this case, I consider the difference 7.5% to be small.

However, when I looked a the price chart of Sembcorp Marine for the past few months (see below), I saw that it had dropped from $0.191 on 24 June to $0.123 on 8 August to the current price of $0.08.

The price had dropped during the past two months due to this rights issue. 

I consider that the price drop has been excessive. My guess is that the share price should be worth at least $0.123. 

I decided to take up the rights issue(300,000 rights and 100,000 excess rights). I will also be applying for the rights on behalf of my family members.

Caution
Normally, an investor should study the prospects for the company after the proposed merger and also the outlook for the marine sector. I find it to be too complicated.

I am prepared to take the current share price as reflecting the value of the company - as seen by other investors who studied the reports made by the professional analysts.


Tan Kin Lian

Note  This is my personal view. I am not giving investment advice on the merits of this rights issue to other shareholders.